It’s the $64,000 question these days (for those who remember media back in the days before it got social): How do you know that all those bucks you plow into blogs, and Twitter, and Facebook are doing anything for you? And for that matter, how clear are you about how much you are actually spending on these things? (You do know that “free” is hardly ever truly free, right?)
Olivier Blanchard of BrandBuilder has posted a very solid – and entertaining – presentation on the Basics of Social Media ROI. It’s worth viewing just for the photos and captioning in the slides, but it does also deliver on explaining the basics of social media return on investment. The core argument, I’m sure some will complain, is nothing new – i.e., you have to connect media measurements like “eyeballs” and subscribers to actual financial data like increases in sales if ROI, in its true ALL CAPS corporate sense is really what you are talking about – but I suspect the deep need for repeating this argument will not disappear anytime soon.
(Note: Blanchard doesn’t address ROI in situations where some of the most important metrics might be other than financial – i.e., for mission-driven organization – but the same logic applies: You have to know what those metrics are, and you have to be able to establish a clear connection between social media tactics and any movement of those metrics if you expect to make a convincing argument about ROI.)
I’ve posted the slide presentation above for your convenience, but I encourage you to view it on Slideshare to see the comments – to which Olivier, to his credit, seems to be responding promptly.
Thanks to the Marketing Over Coffee guys for pointing this one out.